JHEC(SH:600273) ZHESHANG SECURITIES·2025-05-06 11:05Investment Rating - The report assigns a "Buy" rating for the company, marking the first coverage of the stock [8][14]. Core Insights - The company focuses on a circular economy model centered around cogeneration, establishing a robust resource-product-recycling resource chain with various enterprises in the Jiaxing Port area, while also developing an energy and chemical circular industry system internally, showcasing significant core advantages and stable operations [1][25]. - The company emphasizes shareholder returns through high dividends and stock buybacks, with a combined dividend yield and buyback cancellation rate expected to approach 10% [6][42]. Summary by Sections 1. Company Overview and Business Model - The company has established a circular economy as its core development model, leveraging its cogeneration capabilities to expand into various chemical products, including caustic soda, PVC, and fatty alcohols, while focusing on domestic demand to mitigate tariff impacts [2][26]. - The company has a diversified product chain with significant production capacities, including 297,000 tons/year of caustic soda and 200,000 tons/year of fatty alcohols, and is actively enhancing its competitive edge through ongoing projects [4][29]. 2. Steam Business and External Circulation - As the only steam supplier in the Jiaxing Port area, the company benefits from strong policy and regional barriers, ensuring stable profitability through coal-heat linkage pricing and continuous optimization of cogeneration processes [3][49]. - The steam production has shown steady growth, with production increasing from 7.3 million tons in 2014 to 11.9 million tons in 2024, reflecting a compound annual growth rate of 5.0% [58]. 3. Chemical Business and Internal Circulation - The company’s chemical business, particularly in caustic soda and fatty alcohols, demonstrates strong profitability, with caustic soda and fatty alcohols contributing significantly to overall gross profit [61][62]. - The company is positioned in the core consumption area of the Yangtze River Delta, enhancing its competitive advantage in the caustic soda market, where electricity costs are a major factor [4][66]. 4. Financial Performance and Forecast - The company’s revenue is projected to grow steadily, with expected revenues of 104.12 billion, 115.83 billion, and 127.55 billion yuan for 2025, 2026, and 2027 respectively, alongside net profits of 11.67 billion, 13.32 billion, and 15.12 billion yuan [7][13]. - The company maintains a low debt level, with an asset-liability ratio of only 22.69% as of the end of 2024, providing flexibility for future financial maneuvers [43].